IRS Withholding Calculator

How withholding works

Every paycheck, your employer withholds federal income tax based on your W-4 elections. The goal is to withhold just enough so you neither owe a large balance nor give the IRS an interest-free loan via a big refund.

When to update your W-4

Major life changes — marriage, divorce, a new child, buying a home, or a significant raise — can throw your withholding off. The IRS recommends checking your W-4 at least once a year, ideally in January or after any life event.

Understanding Form W-4

The current W-4 (redesigned in 2020) has five steps. Most people only need Steps 1 and 5. Use Step 3 for dependents, Step 4(a) for other income, Step 4(b) for extra deductions, and Step 4(c) for additional withholding per period.